Your step-by-step guide to reducing business travel expenses

Business travel is still considered an essential part of business operations for many companies of all sizes, whether it’s meeting clients, attending industry events or even expanding to new markets. 

However, if your costs are not controlled, your travel expenses bill can easily go through the roof, eating into your profits and stretching the limits of your budget.

Business travel doesn’t mean that your team has to suffer, or be uncomfortable, to save money.  Instead, it’s about making the right decisions, getting better deals and using technology to use your business’s money well. This guide will show you how to cut business travel expenses while maintaining your employees’ productivity and comfort.

STEP 1: NEGOTIATE TRAVEL RATES

The first way to cut business travel costs is through negotiation. Many travel providers offer discounts to businesses that book frequently or in bulk. By taking a strategic approach, you can secure better deals on flights, hotels, and car rentals.

Here’s our roundup of tips on how you can get better rates. 

✈️ How to get the best flight deals

Check out corporate travel agencies: partnering with a travel management company (TMC) can give you access to exclusive discounts and negotiated rates. These agencies have industry relationships that can lead to significant savings.

Investigate corporate travel accounts: many airlines give discounts to the businesses that fly often with them. Check if your company qualifies for corporate travel programmes that provide lower rates and other benefits.

Choose advance bookings: the best time to buy flights is often three weeks out. Try to purchase your flights about three weeks prior to departure. Fares closer to the travel date are often more expensive, rather than ‘last minute’ rates.   

Have flexible travel dates: if your schedule is flexible, you can fly on less convenient days and save money. According to the studies, flying on Tuesdays and Wednesdays is cheaper than the other days of the week.

Check out group bookings: if several employees are going on the same business trip, look for group booking rates with the airlines. They often have a web page or business-to-business team dedicated to this service. 

Consider low-cost airlines: although these airlines may not provide the same level of service as the major carriers, they can help you save on short-haul flights.

✅ Require pre-approval for high-cost trips

Introduce an approval process for international or high-cost travel to ensure expenses match your business objectives.

🏨 Get the best hotel rates

Corporate rates can save money: repeat business travellers are usually offered lower rates by many hotels. Establish a relationship with preferred hotel chains to get better rates from them. Most hotel groups offer this service, even the budget hotel providers.  

Negotiating directly: do not use third party sites and always try to call the hotel and ask for their corporate discount. Hotels pay commission to third party sites and it’s often possible to secure a discount through direct contact. So, shop around.

Avoid peak periods: prices are highest during the peak travel seasons, so try to avoid these times, if possible and save money.

Benefit from loyalty programmes: joining a hotel loyalty programme can bring your company points, free nights, and other benefits.

Think about alternative accommodation: serviced apartments and budget hotels can be a good value for the money for longer stays.

🚘 Cut car hire costs

Look at long-term rental discounts: if your employees need cars for more extended periods, then long-term rental contracts can be cheaper than the daily rates.

Avoid airport car hire: vehicles rented from airport desks are usually more expensive because of the extra charges that come with them. Look for branches away from the airport. Some providers offer a car drop-off service to a hotel or workplace.   

Negotiate with car providers: if your business rents cars often, ask for a corporate agreement for lower rates.

Choose economy models: standard and economy cars are usually much cheaper to hire than  than the luxury models.

Use ride-sharing alternatives: in some cases, it may be more economical to use apps like Uber or Bolt, abroad or in the UK, than it is to rent a car, which may of course be stationary for much of the business trip. 

STEP 2: USING TRAVEL MANAGEMENT SOFTWARE

Travel management software is a great tool if you want to optimise travel expenses for your business. These platforms centralise booking, track spending, and enforce travel policies to ensure cost efficiency.

The advantages of travel management software

Centralised booking: the platform can be used to book flights, hotels and transport for your employees, reducing the chances of incurring excessive expenditure.

Policy compliance: travel management software can help you to enforce your company travel policy, so that your employees are not able to spend more than the set limits. We’ve produced a handy guide to creating a travel expense policy.

Real-time travel expense tracking: means that your business has a clear view of your travel spend, to avoid overspending.

Pre-approved bookings: travel management software can provide pre-approved options, so your employees are not likely to incur unnecessary expenses.

Integration with expense reports: travel management platforms are integrated with expense management tools to make reimbursement and financial report generation easier.

Investing in the right travel management software can improve cost efficiency and remove administrative burdens from your finance team.

STEP 3: SETTING EXPENSE LIMITS AND GUIDELINES

Having a clear expense policy is important in the management of business travel expenses. Without guidelines, your employees may unknowingly spend more than is necessary and blow the budget.

💡 Key elements of a business travel policy

Define acceptable travel classes: decide whether employees should book economy or business class flights based on factors like distance and flight duration.

Daily spending limits: determine the maximum limit which employees can use for accommodation, meals and transportation.

Preferred vendors: identify and communicate which airlines, hotel chains and car hire companies your employees should use, to get the best rates from your company’s negotiations.

Advance booking: ensure that your employees book their travel tickets at least a certain number of days before they travel, to benefit from cheaper tickets.

Meals and entertainment expenses: define the allowable daily expenses for client entertainment and meals.

Non-reimbursable expenses: provide a clear list of all the expenses that will not be paid for, such as in-room mini-bars and premium train or airline seating.

🔒 How to enforce expense limits

Prepaid corporate cards: Issue company cards with pre-set spending limits.

Expense approval workflows: require manager approval for any travel expense exceeding a certain amount.

Regular policy reviews: adjust guidelines as needed, to reflect your current travel costs and your company’s budget.

STEP 4: AUTOMATING EXPENSE REPORTS

Preparing travel expense reports manually is time-consuming and prone to errors. Expense management software automates the process of approval of expenses, reduces cases of fraud and provides for correct reimbursement.

Set up approval workflows so that managers can review and approve expenses quickly, ensuring compliance without unnecessary delays. 

✅ The advantages of expense report automation

• Faster reimbursements: speedy repayment of your employees' expenses can enhance their satisfaction.

• Error reduction: expense management software helps to minimise some common mistakes made in reporting and calculation.

• Fraud prevention: some AI-enabled expense management tools can identify duplicate receipts or unauthorised expenditure.  

• Integration with accounting systems: expense management software can integrate with business accounting platforms such as Xero and QuickBooks to monitor and reconcile financial flows quickly and easily.

• Mobile accessibility: employees can submit expenses quickly, saving time through a mobile app.  This can eliminate the need for manual receipt submissions - receipts can be easily captured and uploaded with a single tap. An expenses app enables you and your employees to create expense claims, track company mileage, review employee expenses and control employee card security settings all within the app.

• Enable receipt scanning and OCR technology: optical character recognition (OCR) technology allows employees to scan receipts using their smartphones, making expense submission effortless and reducing the risk of lost documentation.

Monitor trends and adjust policies: regularly reviewing travel expenses using automated reports can help you to identify cost-saving opportunities and adjust policies accordingly.

Through the automation of travel expense reports, your business will be in a position to improve on the travel expense management process, increase transparency and reduce the administrative workload.

STEP 5: LEVERAGING LOYALTY PROGRAMMES

Loyalty programmes can be very useful in managing travel costs if they are used correctly. Many airlines, hotels and car rental services offer rewards that businesses can redeem for free travel, upgrades and discounts.

🛩 How to get the most out of airline loyalty schemes

• Frequent flyer memberships: encourage your employees to join the chosen frequent flyer programmes and centralise the points into a single corporate account, for wider benefits, such as travel incentives or prizes related to business performance.  

• Alliance Partnerships: select airlines that are part of global alliances (e.g. Oneworld, Star Alliance) to get more benefits.

• Mileage redemption: use the miles that are accumulated for free flights, upgrades or even lounge access.

• Redeem miles or points strategically: use points for high-cost trips or last-minute bookings where savings can be maximised.

🏨 Earning hotel rewards

• Corporate hotel memberships: sign up for the hotel loyalty programmes that provide discounts and additional benefits.

• Flexible booking: ask your employees to use the same hotel chains to help them accumulate the scheme benefits more quickly.

• Free night redemptions: use the points your business has earned to offset the cost of employee accommodation on their future business trips.

💰 Car hire discounts and rewards

• Business loyalty plans: many car hire firms provide discounts and free rentals to frequent corporate travellers.

• Bundle packages: make bookings of flights and car rentals at the same time to gain more discounts.

Reducing business travel costs doesn’t mean cutting corners or compromising efficiency. By negotiating better rates, leveraging technology, implementing strong expense policies, and making smart use of loyalty programmes, your business can significantly cut travel costs while maintaining productivity.

By understanding and maximising the reward programmes available in the travel market, your business can optimise travel expenses and improve the effectiveness of your travel budget. 

With the help of the tips and cost-saving measures we’ve provided, we hope you’ll see that it’s possible for your business to have a good travel management strategy that is both efficient and cost-effective.

Cutting business travel costs is a matter of simple arithmetic, combined with the use of technology, well defined policies and loyalty programmes. 

First step? Check the current state of your travel spending and identify where you can make changes. Whether it is through getting better rates, implementing travel management software or even automated expense reporting, implementing these changes now will benefit your company in the future.

With the help of this step by step guide, your business can save a lot of money while making sure that your employees are traveling in the most productive and comfortable way. 

Is it time to change your business travel policy and learn how to control your expenses?

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.